Economic concerns of a walkout

With Sundstrand pushing the UAW for concessions similar to those of the 2003 lockout, the union weighs whether a work stoppage is in its best interest.

By Nate Legue

BusinessRockford.com

The labor contract for union workers at the region’s largest aerospace manufacturer expires Sunday, making a work stoppage possible five years after bargaining employees were locked out in a contract dispute.

Negotiators from United Aerospace Workers Local 592 and Hamilton Sundstrand worked feverishly last week to hammer out a tentative agreement that is expected to go to union members for a vote Sunday.

But with their ranks shrinking, a soft economy and a hostile national climate toward labor, will members have much choice but to accept the contract offer, even if it includes big concessions?

It depends. As it turns out, the flagging economy could help the union’s cause.
Or not.

The last work stoppage began in 2003, when 780 union workers overwhelmingly rejected the company’s contract offer, prompting Sundstrand to lock them out for more than five weeks.

When they returned, the rank-and-file accepted a huge concession: the phasing out of company-paid retiree health benefits. The union also agreed to 15 percent annual increases in health insurance premiums that ate up much of the wage gains provided in the contract.

This time, the union is half that size. It has witnessed scores of its positions outsourced or shipped to a factory in Singapore. One in five local Sundstrand employees is represented by the United Aerospace Workers Local 592.

The last round of layoffs, announced this year, will bring the union ranks to about 370 people and send the last of local machining work overseas.

“Technology and capital are much more mobile as compared to 30, 40 years ago,” said Michael LeRoy, professor of labor and industrial relations at the University of Illinois at Urbana-Champaign. “A multinational can set up a world-class production facility in Vietnam as well as in Rockford.

“The technology factor has a de-skilling effect. That’s troubling. When you have a manufacturing process that takes away skill and substitutes technology, that diminishes the leverage the American worker has.”

Other factors weaken the union’s leverage, too. Local unemployment is high. During the last lockout, the temp agency Hamilton Sundstrand hired to replace the union workers received 1,000 applications. The work stoppage was resolved before the corporation hired those replacements, but with unemployment and underemployment high, there is likely a pool of workers eager to fill Sundstrand’s blue-collar jobs.

But one labor expert said a poor economy doesn’t always work against bargaining employees.

“Historically, it’s not been bad time to strike,” said Paul Kleppner, director of the Office of Social Policy Research at Northern Illinois University in DeKalb. “During a time of recession, a company is eager to make whatever they can make. If the recession is going to cost them 10 percent of their sales, they don’t want a strike to make them lose the other 90 percent of sales. There’s no reason to believe that is going to prejudice against a labor force.”

The bigger impact on the labor movement has been the steady shrinking of its influence on the work force. In 1983, one in four Illinois workers in private enterprise was represented by a union, according to labor data Web site unionstats.com. By 2007, one in 10 workers was represented by a union.

And several years of Bush-administration appointees to the National Labor Relations Board, the governing body that oversees enforcement of the New Deal-era law that governs union and management interaction, has been “pretty consistently anti-labor,” Kleppner said.

“It’s hard to resist a management proposal at this point and that’s even different from 10 years ago,” LeRoy said. “With the Democratic Congress and the possibility of having a Democratic president, this situation could change.”

Reach staff writer Nate Legue at 815-987-1346 or nlegue@rrstar.com.